Re-starting an Adjudication: Second chance - first impressio

Re-starting an Adjudication: Second chance to make a first impression.

What are your options if you start adjudication but then run into difficulties? Can you withdraw from the adjudication process and start again? The recent TCC case of Jacobs UK Limited v Skanska Construction UK Limited [2017] EWHC 2395 (TCC) considers the possibilities and consequences of withdrawal.

Background Skanska engaged Jacobs under an Agreement to provide design services for a PFI project to replace street lighting in Lewisham and Croydon (the "Agreement"). There was a dispute about the adequacy of Jacobs’ services and Skanska gave notice of intention to refer the dispute to adjudication. Jacobs raised jurisdictional challenges regarding the adjudication provisions of the Agreement complied with the Housing Grants Construction and Regeneration Act 1996 as amended (the "Construction Act). Crucially these jurisdictional issues were resolved by an ad hoc agreement between the parties which, amongst other things, included an agreed timetable for the adjudication process. The Referral to Adjudication and Jacobs’ Response were served in accordance with the agreed timetable. Skanska requested an extension of time for service of its Reply to the Response as its counsel became unavailable. Jacobs refused the request and the adjudicator would not grant an extension without the agreement of both parties. Skanska then withdrew its reference to adjudication and invited the adjudicator to resign and he did so. 10 days later, Skanska gave a fresh notice of adjudication to begin a second adjudication.

Can you lawfully withdraw from adjudication and start again? This was the first question to be decided and Mrs Justice O’ Farrell held that the referring party was entitled to withdraw its adjudication claim even after the Referral had been served, even though it had acted unreasonably. Mrs Justice O'Farrell also confirmed that where a party has legitimately withdrawn its adjudication claim there is nothing to prevent that party from pursuing the same or substantially the same claim again in a later adjudication. Although there is no principle of abuse of process in adjudication, the learned judge said that the court could grant an injunction to restrain a second adjudication if the referring party’s conduct was both unreasonable and oppressive. On the facts, Skanska had acted unreasonably in withdrawing the first adjudication but its conduct in starting again was not of itself oppressive. Helpfully, the court gave examples of conduct that might be considered to be unreasonable and oppressive:  where the adjudicator does not have jurisdiction (e.g. where the same dispute had already been decided in an earlier adjudication);  where the referring party had failed to comply with the adjudication agreement (e.g. failure to pay sums awarded or costs);  if the further adjudication was “vexatious”, as in the case of serial adjudication in respect of the same claim.

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